Marin Clean Energy raises rates 7 percent, considers expansion

The rate hike that took effect Sunday comes as the public energy authority continues to attract new members. The county of Napa and the cities of Albany and San Pablo have all requested permission to join.

"The rate change this year lines up with power supply costs that we're seeing in the market, and the same power supply costs have affected PG&E rates as well," said Dawn Weisz, Marin Clean Energy's executive director.

Weisz said customers of Pacific Gas and Electric Co. will still be paying more for electricity when that company's next scheduled rate hike goes into effect on May 1.

PG&E spokeswoman Brittany McKannay said, "I cannot speculate what would be accurate in May because those numbers have not been finalized."

Weisz said with Marin Clean Energy's rate increase, an average MCE residential customer will be paying $82.28 per month, about 72 cents less per month than a similar PG&E customer when that company's next rate hike takes effect a few weeks from now. She said an average commercial customer of MCE will be paying $13.96 a month less than a comparable PG&E commercial customer.

McKannay said an average residential customer of PG&E currently pays $79.41 per month.

Weisz said the California Public Utilities Commission has directed PG&E to begin passing along to customers costs that the company has been deferring for over a year. These costs, which MCE is already including in its rates, reflect the added expense of energy production that creates greenhouse gases. Because of new cap and trade laws, greenhouse emitters must purchase pollution credits.

Weisz said a state requirement that retailers of electricity obtain an increasing amount of their energy from renewable sources — 33 percent by 2020 — is partially responsible for the increased power supply costs of both MCE and PG&E. She said MCE continues to exceed the state mandated levels, while PG&E is lagging behind them.

"Also, market prices are up slightly from the prior year, just for standard, conventional power," Weisz said.

MCE, which consists of the county of Marin, all 11 of Marin's municipalities and the city of Richmond, is the first successful attempt in California to launch a new, public model for providing electricity to residents. It serves as the retail electricity provider for its 124,000 customers, who continue to also pay PG&E for transmission and distribution of their electricity.

Weisz said MCE's rates will be lower despite the fact that the California Public Utilities Commission requires MCE to pay PG&E a special fee to compensate it for energy contracts it entered into before customers opted to switch energy suppliers. For example, she said of the $82.28 that an average MCE customer will pay each month, $5.89 will be added PG&E fees.

"Our customers are paying $13 million this year alone to PG&E in departing load charges," Weisz said. "It's really an onerous charge. It's not tied to the real needs that PG&E has for buying power."

She said MCE will appeal to the utilities commission this year to reduce the fee.

Many MCE customers, however, are more interested in cutting their greenhouse gases than trimming costs. MCE was formed primarily because critics of PG&E felt the investor-owned utility was moving too slowly to boost its use of renewable energy sources.

Currently, 50 percent of the MCE's energy comes from renewable sources, while renewable sources account for only 20 percent of PG&E's energy. MCE also estimates — using data supplied by third-party organizations such as the Climate Registry — the emission factor of its portfolio in 2012 was 19 percent lower than PG&E's reported emission factor for the same year. 2012 is the most recent year for which PG&E numbers are available. Emission factors express the rate at which greenhouse gases are produced.

McKannay noted, however, that if the energy PG&E gets from large hydroelectric projects and nuclear plants were counted as renewable, then nearly half of the company's energy would come from renewable sources.

MCE is currently studying the potential customer bases in the county of Napa and the cities of Albany and San Pablo to determine if it can absorb these jurisdictions economically. Weisz said the evaluation will take three to four weeks. She estimates the addition of all three jurisdictions could add another 27,000 customers to the MCE.

In his letter requesting admission into MCE, San Pablo Mayor Paul Morris said that his city has a goal of reducing its greenhouse gas production 18 percent below 2005 levels by the year 2020.

Morris wrote, "We believe membership in a Community Choice Aggregation program such as MCE would go far in helping the City reach these goals, as well as provide our residents with greater choice in the energy marketplace."